My Lords, I will look carefully at what I have said and what the noble Lord has said. I think I said—and will repeat if I have not said it already—that it is important to have some flexibility, particularly at the lower end of contract letting, precisely to give local authorities and others the freedom of judgment for which the noble Lord asks. The more one codifies these aspects in statute, and tightens the definition, the greater the risk—this is something we have wrestled with in Committee—that one limits the flexibility that the noble Lord seeks for local action.
A formal regulatory evaluation of whether each public contract delivered “social value” and “local economic growth” could also be an unnecessary burden on contracting authorities. I repeat my view that local contract management should be able to judge the effectiveness of all aspects of the contract. The Bill makes provision for the publication of information on the performance of large contracts—currently, those valued at over £2 million—which we consider a reasonable and balanced approach.
The Government do not support the use of a debarment list for any purpose other than to designate suppliers that meet a ground for exclusion and have failed to address their risk. Debarment is a last resort to be used when a supplier poses a significant risk to contracting authorities or the public, following criminal or other serious misconduct. We do not consider it appropriate that failure to meet characteristics such as social value should form the basis of such a punitive sanction.
Amendment 46, tabled by the noble Lord, Lord Clement-Jones, who spoke with, as always, great passion and authority on these subjects, seeks to insert an additional principle on automated decision-making and responsible and ethical use of data when carrying out a procurement. The new data platform will deliver enhanced centralised data on UK public contracts and spending. All data that is published will be freely accessible through the central digital platform. This is in support of the objective set out in Clause 11(1)(c), which expects contracting authorities to have regard to the importance of
“sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions”.
The data displayed in the platform pertains to the public sector’s commercial activity, including tender opportunities, contract awards, spending and so on. The UK’s historic commitments to data protection standards and public trust in personal data use will continue to be at the heart of the regime. The proposals build on the fundamental principles of the UK GDPR, and these will continue to underpin the trustworthy use of data to support our central digital platform.
The noble Lord asked why one would be reluctant to legislate for the ethical use of data and automated decision-making. We are not legislating for specific rules for certain sectors but instead setting the legislative framework for public sector procurement. In the same way that we are not legislating for the standards for construction projects, we are also not legislating for the standards for data projects. The Government already issue extensive guidance––the noble Lord referred to some of it—on best practice where appropriate, and contracting authorities should have that in mind when purchasing AI or data products and services.
The Government are resisting this amendment, as policies are still evolving at government level on ethical use of automated decision-making and data. This is a fast-changing world—as the noble Lord knows better than most—so legislating in the Bill could be a premature fix, as it were. I have already referred to the existing guidelines on responsible use of AI procurement for public sector organisations on how to use data appropriately. These evolving policies should be applied by contracting authorities as appropriate. That said, we are open to more engagement on this topic, and I have listened again very carefully to the points that the noble Lord makes. I can give an undertaking to him, as I did earlier to others, that we will engage with him between now and Report, because he is right that this is an important area. We are just cautious about seeking to fix specific things in legislation at the moment.
My noble friend Lady McIntosh of Pickering is, regrettably, unable to be here, for reasons referred to earlier in this Committee debate—and I confess I had nothing to do with that. Her amendments are around the subject of acting with integrity and being seen to act with integrity, which my noble friend Lady Neville-Rolfe also referred to. The integrity objective will oblige contracting authorities to consider how best to prevent fraud and corruption through good management, prevention of misconduct, and control. As well as oversight and control, open competition and the strengthened transparency requirements in the Bill will enhance integrity in public procurement.
It is essential that the procurement regime in the UK commands the trust of suppliers, the public and our international trading partners. While it is important that contracting authorities actually act with integrity—and that is a fundamental point—the objective is drafted as it is due to the importance that those observing procurements can see that contracting authorities are acting with integrity. We will, however, reflect on my absent noble friend’s amendment and the points made in debate, including the direct question that my noble friend Lady Neville-Rolfe asked me, to which I do not have an answer as I stand here, about precedents in legislation—clearly, her question will be in Hansard and requires an answer.
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Amendment 51, tabled by the noble Baroness, Lady Hayman, and the noble Lord, Lord Coaker, seeks to add proportionality to the list of procurement objectives. Proportionality is a key concept but only when applied in the right way. To ensure that it is captured appropriately, we have introduced proportionality where it is useful to do so in specific clauses in the Bill
in order to explain exactly what the contracting authority is obliged to do. For example, in Clause 19 the procurement procedure is to be proportionate to the
“nature, complexity and cost of the contract”,
something that noble Lords who have spoken have asked for. In Clause 22, award criteria are to be
“a proportionate means of assessing tenders, having regard to the nature, complexity and cost of the contract”,
and in Clause 21 the conditions of participation in the procurement are to be a proportionate means of checking that suppliers have the necessary capability, in order to avoid treating smaller suppliers unfairly.
I have certainly heard what noble Lords on both sides have said about the importance of also respecting and protecting the position of small charities and voluntary providers, and we will go away and see if there is some way in which we can underline the importance that the Government attach to them. However, we are not of the view that it is helpful to introduce a broad, free-standing concept of proportionality on top of what we have put in the Bill, which could call into question the application of that concept in key areas where it is actually written into the Bill.
Amendment 56, tabled by the noble Lords, Lord Wallace of Saltaire and Lord Fox, would change Clause 11(2) so that contracting authorities would have to treat all suppliers the same, rather than being able to treat them differently where differences were justified. The equal treatment of suppliers is clearly a key principle in procurement law, and Clauses 11(2) and (3) of the Bill acknowledge that. However, there are circumstances in which it is right to prefer some suppliers over others; indeed, the regime would not work if contracting authorities could not treat those who offered better bids differently from those who offered worse ones. Clauses 11(2) and (3) together seek to draw a distinction between those circumstances under which differential treatment is unacceptable, and can form no part of the procurement regime, and those where it is a necessary part of delivering improved bids through legitimate competition. Even if such a difference is justified, contracting authorities must do what they can to ensure that it is not unfair. We believe that the amendment would remove that flexibility, but again I am happy to engage with the noble Lords on that in more detail.